As the KOSPI index experienced a significant drop, domestic investors have increased their purchases of U.S. stocks, particularly focusing on semiconductor-related exchange-traded funds (ETFs). However, concerns about investment losses are rising due to the sharp decline in ETF prices.
According to the Korea Securities Depository, from October 1 to 19, domestic investors recorded a net purchase of approximately 5.6 trillion won in U.S. stocks, which is more than four times the net purchase amount for the entire month of September.
Notably, from October 7 to 19, 98.4% of the net purchases of U.S. stocks were concentrated in the SOXL ETF, which tracks the Philadelphia Semiconductor Index at three times the leverage. During this period, the net purchase amount for SOXL reached about 5.43 trillion won, while its stock price fell by 39.9%.
Factors contributing to the decline in semiconductor stocks include concerns over competition from Chinese semiconductor firm Changxin Memory Technologies (CXMT) and worries about the financial burden of investments in artificial intelligence (AI).
However, analysts suggest that there is no need for excessive pessimism regarding the long-term growth potential of the semiconductor industry. They caution that when investment funds concentrate in specific sectors, losses can be amplified during market corrections.
* This article has been translated by AI.
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